If the Scottish Rate of Income Tax is different to the Income Tax operated by the rest of the UK then as a PAYE operator you will already know if the person being taxed is a Scottish taxpayer in order to collect the correct PAYE via the tax code received from HMRC. HMRC would expect you as a Registered Pension Scheme Administrators (RPSA) operating PAYE, to adjust your IT systems to collect the right amount of Income Tax.
Pension schemes operating net pay
Where Pension scheme members pay contributions to their employer’s pension scheme under the net pay arrangement, the correct rate of tax relief on their contributions will be claimed.
Pension schemes operating relief at source
The Government has agreed that from April 2016 until April 2018, Registered Pension Scheme Administrators (RPSAs) can continue to claim relief at source (RAS) at the rest of the UK basic rate for all scheme members, irrespective of any difference between the Scottish and the rest of the UK basic rates. This is to allow time to prepare your systems. However we would expect you to inform your members about the implications of the Scottish Rate of Income Tax and its impact on RAS. If the Scottish Government choose to vary the Scottish Rate of Income Tax for the tax years beginning 6 April 2016 or 6 April 2017, HMRC will reconcile any difference in RAS for Scottish taxpayers by adjusting their tax liability through the Self-Assessment process or through PAYE coding. For the tax year beginning 6 April 2018 onwards, HMRC will notify RPSAs of the rate of RAS to apply for both Scottish scheme members and those in the rest of the UK, enabling RPSAs to claim RAS at the correct rate. Scottish rate news page
HMRC has developed a Scottish Rate of Income Tax news page to provide updates and the latest information to employers on the implementation of the Scottish Rate of Income Tax.
Scottish Rate of Income Tax guidance 29 October 2015
New sections of guidance have been added to GOV.UK which includes technical guidance on Scottish taxpayer status.
The technical guidance includes detail on an individual’s ‘place of residence’, ‘main place of residence’, tests for Scottish taxpayer status and evidence used to establish someone’s status.
Guidance for employers and pension providers explaining how the introduction of the Scottish Rate of Income Tax (SRIT) will affect them has also been added.
And additionally there is guidance for individuals on how the SRIT will work, what to do if you move to or from Scotland and if you live in more than one home.
Scottish taxpayers will be contacted directly by HMRC before SRIT comes into force in April 2016 and HMRC is asking individuals whose main home is in Scotland to update address details with them if they do not receive a letter by the end of February 2016.
HMRC Technical Guidance on Scottish Taxpayer Status 3 November 2015
In June 2015 HMRC published draft technical guidance on Scottish taxpayer status for comment and final guidance has now been published.
HMRC has thanked all those involved in this consultation process, both through comments on the draft guidance and through attendance of stakeholder sessions. As a result of the comments and suggestions made, the guidance has been reviewed and the final copy now published . There were 20 responses to the consultation on draft technical guidance and the vast majority of respondents were broadly happy with the high level principles illustrated and approach taken. Much of the content within the final published technical guidance therefore remains little changed from the consultation draft.
CIPP Policy News Journal
25/04/2016, Page 408 of 453
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